15

Tourist destinations that are well-connected to metropolitan cities are also developing as outstation real estate destinations. These houses serve as weekend gateways as well as investments. It can be let out during the tourist season and can also be sold off in the unlikely event of a liquidity crunch. 

The earlier trend in this segment was more consumer centric real estate development where the consumer would buy the land and commission its development. However, of late, prominent real estate players have ventured into the segment, providing ready-made offerings. According to sources, the segment witnessed substantial traction before demonetisation from High Net worth Individuals (HNIs) and Non-Resident Indians (NRIs).

Developers’ interest

Shristi Infrastructure Development Corporation Ltd. has developed the sprawling Shanti Shristi project in Shantiniketan, Bolpur, West Bengal.  Saurav Bose, Senior Manager, Sales and Marketing, Shristi Infrastructure, informed BE, “We are offering customers ready-made offerings. If they had to make their own bungalows, they would have to mitigate a number of issues. However, if they are buying our offering, they can do so in a hassle-free way and would avail the same facilities that they would have availed had they build their own house or even more. For example, maintenance and security, which are assured in our project.” 

Despite weak market trends, the Shanti Shristi project has received considerable traction over the years. According to Bose, “The last fiscal year was very challenging due to a lot of confusion with GST and other related issues. Real estate sales were affected due to customers becoming over conscious and builders giving discounts to counter the GST issue so as to boost sales. Our performance should not be taken into consideration for this period as we had sold most of our offerings before this phase and were only selling the last few left properties. However, other projects those were in the developing phase during this time felt the pinch.” Apart from big developers like Shristi, individuals are also buying plots and building houses in tourist locations.

Locations

Shantiniketan in Birbhum, Raichak and Diamond Harbour in South 24 Parganas, Purulia, Bankura, Jhargram and Salboni in West Midnapore are preferred locations for this segment in West Bengal. Bose added, “Shanti Shristi is majorly occupied by customers from Kolkata who have one or two houses at other locations. At Santiniketan, the hospitality sector is not as profitable as the housing sector. Initially we started our project as a resort, but later we turned it into bungalows due to poor tourist footfalls. But in the last two to three years, the location has seen a huge boom in seasonal footfalls. This has translated well for our project.” He added, “Sea side locations like Mondarmani and Digha in West Bengal attract tourists. But they are not yet developing as outstation real estate market. Shantiniketan has actually flourished in this segment but many other places need to be explored.”

The Aamby Valley City developed by Sahara India Parivar is an important offering in this segment. Connecting the cities of Mumbai and Pune to the quaint Western Ghat tourist destination of Lonavala, this project can be referred to be one of the first of such outstation projects in India.

Glitches

Soumendu Chatterjee, City Head (Kolkata), ANAROCK Property Consultants, told BE, “With a positive turn in the market during H1, FY 2019, the trend of buying second homes or vacation homes has seen only a partial upswing. Second homes are generally bought by people looking either for rental income or a family getaway from the crushing everyday realities of city life. With the curb on currency and extra cash vanishing from the market after demonetisation, the appetite for second homes has definitely reduced and developers have also curbed new supply or launches of second home projects due to low demand. In India, the economy is far from well at the current time and people buy second homes when the economy is flourishing. The second home buyers that are still on the market are also waiting for prices to go further south and the market to settle down a bit.”

Chatterjee mentioned another problem and stated, “All new projects must mandatorily be registered under RERA in most states and even West Bengal has its own version of the regulator. However, the state’s regulator is not governed by the centre and this gives less assurance of the interests of property buyers being protected.”

Connectivity from metro cities has always been a deciding factor for prices in this segment. Locations having easy and fast connectivity with a metropolitan city will be the most preferred in this segment.